Regulatory and Supervisory Technologies for Financial Inclusion
Categories : RegTech, Regulation of Digital Financial Services
Financial inclusion is one of the primary goals for financial regulators worldwide. As a result, many countries have made considerable strides in increasing access to formal finance to the unserved and underserved populations. However, many remain financially excluded.
But today, digital financial services (DFS), Financial Technologies (FinTechs) and other non-bank entrants are rapidly changing the narrative on financial services access, usage, and quality across all consumer segments, including the financial industry’s evolution driven by innovation and great potential to improve financial inclusion.
Nevertheless, these technology-enabled innovators and financial service providers (FSP) come with a set of emerging challenges and concerns for regulators, such as cybersecurity threats, data security, privacy and protection, money laundering/terrorism financing (ML/TF) risks, complexities and inefficiencies around supervision and regulatory compliance or reporting, and particularly the necessity for financial regulators to develop capabilities and adopt tools for effective and efficient regulation compliance, supervision and oversight outcomes.
Accordingly, in this report, AFI seeks to explore opportunities around RegTech and SupTech as policy interventions to improve financial inclusion and provide policy recommendations and guidance to support and empower financial regulators. Ultimately, this report is expected to aid financial regulators and policymakers as they explore, consider, adopt, and implement RegTech and SupTech innovations without compromising the integrity, safety, and efficient functioning of their financial systems.